ONE BIG BEAUTIFUL BILL ACT PASSED(OBBBA)
What Is the One Big Beautiful Bill Act?
The Big Beautiful Bill Act(BBB) is a comprehensive U.S. tax reform passed in 2025. It introduces significant tax law updates for both individuals and small businesses. At Liberty Tax Accounting (LTA), our goal is to simplify this law for our clients, helping them understand how these changes can reduce tax liabilities and improve financial planning.
20% Qualified Business Income (QBI) Deduction Made Permanent.
Small business owners filing Schedule C, 1120, or 1065 returns now have access to a permanent 20% Qualified Business Income (QBI) deduction. This is a major tax-saving provision that reduces taxable income and allows business owners to reinvest more profits into operations, hiring, or expansion.
For example, a business owner with $100,000 in eligible income could save up to $20,000 in taxes under this deduction.
100% Bonus Depreciation Restored.
The One Big Beautiful Bill Act Summary restores full 100% bonus depreciation for equipment and machinery purchases. This means businesses can deduct the full cost of qualifying assets in the same year they are placed in service, instead of depreciating them over several years.
For instance, if a company purchases $50,000 in new office equipment, it can deduct the entire $50,000 immediately, reducing taxable income for that year.
R&D Expensing – Fueling Innovation.
The BBB reinstates full Research & Development (R&D) expensing, which is a major win for startups, technology firms, and businesses engaged in product development. Instead of spreading deductions across several years, companies can now deduct the entire cost of R&D expenditures in the year they are incurred.
This provision encourages innovation and helps reduce upfront tax burdens for high-growth businesses.
Worker-Friendly Provisions – Tips and Overtime Tax-Free.
The BBB includes worker-focused tax relief provisions. Tips up to $25,000 are tax-free, while overtime pay is exempt up to $12,500 for single filers and $25,000 for joint filers. These provisions are in effect until 2028, providing meaningful relief for hospitality, retail, and service industry employees.
For example, a restaurant server who earns $15,000 in tips will not be taxed on that income under this law.
Simplified Filing for Small Businesses.
The BBB simplifies small business reporting thresholds and reduces compliance requirements. This means less paperwork, faster filing, and fewer chances of penalties due to complex tax rules. Small businesses can now focus more on operations and less on tax administration.
This change also reduces accounting costs for business owners who previously relied on external help for complicated reporting requirements.
Import Tax Changes – E-Commerce Impact.
The BBB eliminates the de minimis rule for imports, meaning that small imports now face new taxes. For e-commerce businesses and retailers who rely on overseas sourcing, this could raise costs and impact profit margins.
Companies that import goods under $800 (previously exempt) must now pay import taxes, changing the cost structure of online retail businesses.
How the Big Beautiful Bill Impacts You.
For individual taxpayers (1040 filers), the BBB introduces tax relief on wages, tips, and deductions. For business owners filing corporate returns (1120, 1065, or Schedule C), the bill provides expanded deductions, bonus depreciation, and simplified compliance.
Liberty Tax Accounting helps clients maximize these opportunities by tailoring tax strategies to individual and business needs.
Why Choose Liberty Tax Accounting (LTA)?
With over 20 years of experience in IRS and state tax filings, Liberty Tax Accounting has built a reputation as a trusted advisor for individuals and businesses. Our expertise covers tax preparation, bookkeeping, payroll, and financial planning.
We serve clients nationwide from our California office, offering personalized tax planning and compliance services.
Office Location: 1600 Dove St., #140, Newport Beach, CA 92660
Phone: (949) 863-9870
Email: support@libertytaxaccounting.com
Website: libertytaxaccounting.com
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